60 seconds with Rajeev De Mello on Fed rates and emerging markets
The Fed's lift-off and increases in interest rates is something which investors have been very worried about over the last couple of years. When you look back over the last 30 years, every time the Fed has moved interest rates, or talked about moving interest rates, it's been a concern for investors in emerging markets and Asia.
This time around it's no different – ever since May 2013, when Ben Bernanke made his speech about tapering Quantitative Easing, emerging market investors have been concerned and the asset class has moved sideways, global investors have withdrawn money and there have been concerns about various countries. However, when one looks back carefully, it is generally the preparation of the Fed's lift off which causes that most concerns to emerging markets and to Asia. However, once the Fed does start its lift-off, markets tend to be calmer and this time we think is no different. The Fed in addition is going to be gradual – it has announced that – and there is no pressure from inflation in the US either. So this gradual Fed, we think is going to be positive for emerging markets and Asia.
Any security(s) mentioned above is for illustrative purpose only, not a recommendation to invest or divest.
This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The views and opinions contained herein are those of the author(s), and do not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. The material is not intended to provide, and should not be relied on for investment advice or recommendation. Opinions stated are matters of judgment, which may change. Information herein is believed to be reliable, but Schroder Investment Management (Hong Kong) Limited does not warrant its completeness or accuracy.
Investment involves risks. Past performance and any forecasts are not necessarily a guide to future or likely performance. You should remember that the value of investments can go down as well as up and is not guaranteed. Exchange rate changes may cause the value of the overseas investments to rise or fall. For risks associated with investment in securities in emerging and less developed markets, please refer to the relevant offering document.
The information contained in this document is provided for information purpose only and does not constitute any solicitation and offering of investment products. Potential investors should be aware that such investments involve market risk and should be regarded as long-term investments.
Derivatives carry a high degree of risk and should only be considered by sophisticated investors.
This material, including the website, has not been reviewed by the SFC. Issued by Schroder Investment Management (Hong Kong) Limited.